Day Traders Diary



Investors pushed the S&P 500 (+0.5%) and the Dow (+0.4%) to new record highs on Tuesday, breaking the stock market's two-session losing streak. And while the Nasdaq didn't post a new record close, it did outperform its peers with a gain of 0.7%. 

The top-weighted technology (+0.9%) and financials (+0.4%) sectors led the stock market into positive territory at Tuesday's opening bell, but the tech group soon faded as several of its most influential components retraced their opening gains. Luckily, the financial sector teamed up with the consumer discretionary (+0.6%) and materials (+1.3%) groups during this time to help mitigate technology's influence on the broader market.

Eventually, the technology sector regained its footing to finish with the materials and consumer discretionary groups at the top of the day's leaderboard. However, the financial sector couldn't maintain its early strength, settling in line with the broader market. The major averages never touched negative territory, even during technology's period of weakness, and eventually closed near their best levels of the day.

Within the technology space, mega-cap tech names like Apple (AAPL 146.59, +1.17), Microsoft (MSFT 70.65, +0.87), Facebook (FB 150.68, +2.24), and Alphabet (GOOGL 970.50, +8.69) settled with gains between 0.8% and 1.5% while chipmakers pushed the PHLX Semiconductor Index higher by 0.6%. The technology sector's overall solid performance was an encouraging sign for the broader market, especially after the drubbing the sector took over the last two sessions.

There were pockets of weakness within the consumer discretionary sector, but Amazon's (AMZN 980.79, +15.88) big advance of 1.7% did more than enough to outweigh their bearish influence. McDonald's (MCD 149.82, +1.35) also put together a solid performance, adding 0.9%, after the company's target price was raised to $175 from $165 at Bank of America/Merrill Lynch.

Like many of its cyclical peers, the energy sector (+0.7%) also finished ahead of the broader market, thanks in part to crude oil's positive performance. The commodity held a loss of around 1.0% early in the morning session, but jumped into positive territory amid headlines that Kazakhstan's oil production is expected to decline this summer. WTI crude finished 0.7% higher at $46.43/bbl.

On the countercyclical side, the health care (+0.1%), consumer staples (unch), and utilities (+0.2%) groups finished just a tick above their flat lines while the telecom services sector (-1.0%) ended the day solidly lower as both Verizon (VZ 46.46, -0.73) and AT&T (T 38.68, -0.39) weighed. The wireless giants finished with losses of 1.6% and 1.0%, respectively.

Elsewhere, the CBOE Volatility Index (VIX 10.44, -1.02, -8.9%), sometimes referred to as the 'investor fear gauge', slipped nearly one point on Tuesday after jumping to a three-week high in Monday's session. However, despite the day's risk-on tone, the 10-yr Treasury note ticked up on Tuesday with its yield slipping one basis point to 2.21%.

On the data front, investors received only one economic report--May PPI--on Tuesday:

May producer prices came in at 0.0%, which is in line with the consensus. Core producer prices rose 0.3% while the consensus expected an increase of 0.2%.

The key takeaway from the report is that it supports the Fed's inclination to favor a policy tightening bias.

Tomorrow, investors will receive a slew of economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, May Retail Sales ( consensus 0.1%) and May CPI ( consensus 0.0%) at 8:30 ET, April Business Inventories ( consensus -0.1%) at 10:00 ET, and the FOMC Rate Decision at 14:00 ET.

Nasdaq Composite +15.6% YTD

S&P 500 +9.0% YTD

Dow Jones Industrial Average +7.9% YTD

Russell 2000 +5.1% YTD

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